yashwant🎩 on Warpcast

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yashwant🎩 pfp

Don't let them tell you that the recent decline in L1 fees and mev is bearish for ETH

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timdaub 🥝 pfp

Why not? L1 fee decline now makes revenue and Price to fees ration appear much higher than before EIP-4844. It's a fact of life that Ethereum has willfully discounted blockspace from expensive call data to blob space. I'd assume this makes ETH cheaper in the short run.

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yashwant🎩 pfp

All other things equal, having lower L1 total fees is bullish for a chain because fees are what users pay (and what ETH holders receive as a consolation prize)

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timdaub 🥝 pfp

Not for investors who may judge their assets based on the ratio between price and generated revenues. The generated revenues of ETH are now lower since EIP-4844

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yashwant🎩 pfp

blockspace demand is reflexive in bull/bear conditions. Ie. the gwei gas price rises/falls with bull/bear trends. Maybe this will change in the future, but it's been this way for all of Ethereum's history

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timdaub 🥝 pfp

Then you are wrongly evaluating price to fees. When L2s posted to calldata, this created a lot of demand for Ethereum gas. Now that there is blobspace gas too P/F is down bad https://tokenterminal.com/terminal/financial-statements/ethereum

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yashwant🎩 pfp

I was saying that today's fees don't always tell you about tomorrow's growth

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timdaub 🥝 pfp

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yashwant🎩 pfp

Eth's "federal tax revenue" (fees/mev) recently declined because economic activity is moving to "states" (L2s) and because the "average tax rate" is going down (more blockspace = reduced congestion fees)

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timdaub 🥝 pfp

I‘m actually agreeing with you, sorry it must have come across as irony

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